Government Shutdown Averted—Again

Government Shutdown Averted—Again

September 27, 2011

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Government shutdowns are starting to become almost natural in Washington: the seasons change, and fiscal hardliners in the House of Representatives find a new way to endanger the federal government’s operations.

In the spring, government doors from DC to the Grand Canyon National Park were hours away from closing because of a funding dispute, which was averted with an agreement to cut $38 billion from the federal budget for the rest of the fiscal year. In the summer, the US Treasury came perilously close to hitting the debt-limit before reaching an agreement that called for $2.4 trillion in cuts and a super-committee on deficit reduction.

Over the past several weeks, it seemed like the autumnal shutdown would be over another funding resolution that would also give extra money to the Federal Emergency Management Agency. But the crisis was averted in a deal struck last night that was unlike any yet this year—in this case, the Democrats actually stood their ground and (mostly) won.

So what happened? In short: the April deal extended government funding through the end of the fiscal year, which is Friday. Congress has not yet passed the twelve appropriations bills needed to fund the government for another fiscal year, in large part due to uncertainty about what the super-committee might decide on cuts, and so both parties quietly agreed to pass a “continuing resolution” that would provide money for the government until November.

This continuing resolution wasn’t supposed to be controversial, but Hurricane Irene changed all of that. FEMA spent a lot of extra money to respond to the destruction that stretched across much of the eastern seaboard, and began informing Congress that it could run out of money before the end of the fiscal year—meaning that it would need excess funds.

Suddenly, the House Republican leadership made a radical demand: any extra disaster funding for FEMA would have to be offset by additional cuts elsewhere. Representative Eric Cantor, the House majority leader and close ally of Tea Partiers in the House, led this charge. As I noted on Friday, this was a remarkable line to draw—Republicans were proudly returning to the mindset that federal disaster response was something of a boondoggle, a frame of thinking that led pretty directly to the atrocious response to Hurricane Katrina in 2005. (This was underscored by the fact that none other than Michael “Heckuva Job” Brown endorsed the Republican position.)

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But Senate majority leader Harry Reid refused to back down, and repeatedly said disaster funding should always be passed with no strings attached. Reid said plainly that if the House Republicans didn’t acquiesce, there would be a shutdown and it would be their fault. “I’m not that sure [there won’t be a shutdown], because the Tea Party-driven House of Representatives has been so unreasonable in the past. I don’t know why they should suddenly be reasonable,” Reid said.

Nevertheless, the House passed a bill with deep offsetting cuts last week, after an embarrassing sideshow in which Boehner lost a vote on a bill that apparently didn’t cut enough for the Tea Party—he had to try again with another bill that had even deeper cuts.

In addition to Boehner’s display of incompetence, this was very shaky political ground in appearing to play politics with disaster funding. There were a number of reasons they must have been nervous about their position, all of which Reid had to know:

Polls showed rapidly eroding public support for Republicans’ deficit stance, which was the driving principle behind the standoff. There is also disgust with the rancor in Congress, with even Republican leaders admitting people are fed up with constant standoffs and disputes.

Flood victims were becoming increasingly angry that help might be delayed by theatrics on the deficit. The storm impacted electorally valuable states like Pennsylvania, Virginia, and North Carolina.

Republicans inside and outside of Congress began breaking with the strategy: Tea Party favorite and presidential candidate Herman Cain said FEMA should be funded immediately and Congress should worry about offsets later. Star governor Chris Christie also agreed. Fox News didn’t go into overdrive with the issue as it did with the debt ceiling fight and April budget standoff.

At this time yesterday, it seemed we were headed for a shutdown—neither side was going to back away. But then some accounting math saved the day. FEMA said that it could operate through Friday, the end of the fiscal year, meaning a continuing resolution would not have to contain extra money for FEMA. So the issue of offsets became irrelevant. Yesterday the Senate passed a straightforward bill funding the government until November, with no offsets for the money appropriated to FEMA, and the House is expected to rubber-stamp it on Thursday.

In many senses, this was a win for Democrats—they pledged that FEMA money shouldn’t and wouldn’t be offset with budget cuts, and it wasn’t. House Republicans could still insist on offsets even in this bill, but they won’t. FEMA will receive less money than was in the original, Democratic Senate bill, but that’s a level that will only exist for six weeks, until this resolution runs out in six weeks.

Reid’s hard-line means it’s no longer a given that the party will bow to Tea Partiers in the House at the 11th hour. That’s encouraging—because this wasn’t the last stare-down. In November, there’s another funding bill to fight over.